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4 years ago

Describe how supply and demand impact the cost of a good of service

Business

1 answer:

VARVARA [1.3K]4 years ago

5 0

Answer:

see below

Explanation:

Supply

Supply is the volume of a product or service that suppliers are willing to sell at the market at the stated price. The quantities supplied have a direct impact on the price of the product or service. The ideal volume is the equilibrium quantity, where there is no excess or short supply. Both sellers and buyers are happy with the price at the equilibrium quantity.

Should supply exceed equilibrium quantity, there is an excess supply in the markets. Many suppliers try to sell to a few buyers. Consequently, the prices decrease. When supply is below the equilibrium quantity, it causes a shortage in the market. As buyers compete for the few available products and services, prices increase.

Demand

Demand refers to the quantities that buyers are willing to purchase at a given price in a period. There exist a direct and proportionate relationship between the demand and price of a product or a service. An increase in demand causes the price to rise. When the demand falls, the prices decline.

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The correct words to fill in the blank are:

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4 years ago

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sooo the answer should be...

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4 years ago

Assume that scientific studies provide you with the following information concerning the benefits and costs of sulfur dioxide em

valkas [14]

Answer:

Efficient Abatement Level = 12 million tons

Efficient Marginal Benefit & Marginal Cost = 250

Abatement > Efficient Level : Net social benefit fall ; Abatement < Efficient Level : Net Social Benefit Rise

Socially Efficient setting MB = MC rather than TB = TC , as Net Benefit [ TB - TC] is maximised when MB = MC

Explanation:

a. Socially Efficient level of output is when : Marginal Cost of Abatement = Marginal Benefit of Abatement .

MB = MC

500 - 20A = 200 + 5A

500 - 200 = 5A + 20A → 300 = 25A

300 = 25A → A = 300 / 25

A [Efficient Level of Abatement] = 12

b. Putting value of efficient A in MB & MC, we get :

MB = 500 - 20 (12) = 500 - 240 = 260

MC = 200 + 5 (12) = 200 + 60 = 260

c. If one million more abatement than efficient level is done, MC > MB & net social benefit will decrease. If one million less abatement than efficient level is done, MC < MB & net social benefit will increase.

d. Total Benefit & Total Cost are total gain & cost due to all the units of abatement. Marginal Benefit & Marginal Cost are addition to total benefit & total cost by an additional unit of abatement. Net Social Benefit is maximum when difference between TB & TC is maximum, which is so when they are parallel & their slopes MB & MC are equal.

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3 years ago

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joja [24]

Answer:

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3 years ago